Forster Sees Better Days Ahead for GM-Europe

DETROIT – Market conditions should be more favorable this year than last, says General Motors Europe Chairman Carl-Peter Forster, but he stops short of predicting black ink for his operation in 2006. In a wide-ranging discussion with reporters here at the North American International Auto Show, Forster says GME will continue to make moves to improve its productivity beyond its restructuring program

DETROIT – Market conditions should be more favorable this year than last, says General Motors Europe Chairman Carl-Peter Forster, but he stops short of predicting black ink for his operation in 2006.

In a wide-ranging discussion with reporters here at the North American International Auto Show, Forster says GME will continue to make moves to improve its productivity beyond its restructuring program announced in October, and he says it is likely the operation will offer hybrid-electric vehicles in the future. (See related story: GME Restructuring Moves Forward )

“There are some indications, we might see improvement in the German economy – and that would be big for us,” Forster says. “There’s a glimmer of hope. Of course we have this same glimmer every year, but this year the economic indicators are a little more positive.”

Forster says any improvement in Western Europe this year might not come from higher volumes, however. “Pricing pressure might not be quite as high as it’s been,” he says. “But we just don’t know yet.”

Antara CUV in concept form.

GME says it sold 1,982,300 cars and light commercial vehicles last year, up 1.1% from 2004 levels and good enough for a slight rise in market share to 9.5%.

On the cost side, Forster says GME is wrapping up the “tail end” of its restructuring program that calls for the elimination of 12,000 jobs. Those cuts will be completed this year and next through attrition and early retirement packages.

But Forster doesn’t rule out continued staff reductions if GME fails to increase production.

“Every year, you have to drive 3%-5% in labor productivity gains,” he says. “If you can’t (do that by growing) volume, you have to attrition people out. The question is whether you have to go beyond attrition – I hope not.”

Forster says attrition at GME is running at a range of 1%-3%, depending on the operation, but he adds that between now and 2010 the unit will see a bubble of sorts in the number of people eligible for retirement, potentially making that task easier.

As for black ink, Forster says, “Are we where we want to be in terms of profitability? Absolutely not. But it will be a year of more progress for GME. We’re getting there.”

Forster says he is looking forward to new product boosting fortunes at Adam Opel AG.

That includes the roadster it will share with Saturn, even though volumes will be small.

Opel will begin importing a version of the upcoming Saturn Sky 2-seat convertible next year from General Motors Corp.’s Wilmington, DE, plant. It will be sold in Europe only in left-hand-drive – there will be no Vauxhall version and the car won’t be offered in the U.K.

It’s difficult to “stretch the brand” with an image car like the upcoming roadster “when the core product lineup is not solid,” Forster says, referring to the recent past when Opel marketed its similar, but less-refined, Speedster model.

“Now I believe we have a core with the Astra and (upcoming new) Corsa,” he says. “Now the roadster will help the brand. We may sell only a couple thousand of them, (but) it honestly doesn’t matter. It’s a marketing tool.”

Forster says the roadster is a “good example of the future collaboration” expected between GME and Saturn in North America. That future could include more re-badged Saturn models from North America or vehicles developed jointly by both engineering teams.

“Or perhaps one day, we might export cars from Europe to North America,” Forster says. “It’s all open.

“Once we decided that Opel and Saturn will be sister brands, it opened up all sorts of opportunities.”

In addition to the roadster, Opel will launch a hardtop/convertible Astra and the Saturn Vue-based Antara cross/utility vehicle Forster hopes will counter sagging sales of the Vectra, which is suffering along with the rest of the midsize-car sector in Europe.

And big things are expected from the revamped Corsa, just now hitting the market.

“You tend to have a feeling about a product (before it’s launched), and the Corsa I’m confident about,” Forster says. “I think Corsa will do well toward the second half of the year.”

Also under study is a new large-car entry Opel could share with Saturn. “We haven’t made a final decision yet, but there are opportunities there,” Forster says.

The re-launching of DaewooAuto & Technology Co. vehicles in Europe under the Chevrolet brand “has worked beautifully,” he says, adding the marque will get a further boost from the debut of its first diesel model soon. Sales of the re-badged Daewoos grew 26% in 2005 to more than 240,000 units, giving the brand a 1.2% share of the market, GM says.

The knowledge gap already could be affecting sales of advanced-technology vehicles, which last year accounted for 3.5% of the nearly 17 million cars and trucks sold in the U.S., according to WardsAuto data....More

“Logically, Cadillac is not disconnected from GM,” the longtime luxury executive says. “The way we want to organize the business in the future is that Cadillac will own the entire process, all the things that touch Cadillac.”...More

Through June, FCA says the diesel makes up 18% of the Ram 1500s shipped from the plant but only 12% of the retail mix. The automaker says a 20% retail mix remains in sight. But it should have been achieved by now....More

The vehicles will be tested on suburban roads in Adelaide, the state capital, at the same time the South Australian government hosts an international conference to discuss driverless-vehicle technology and regulation....More

Engineers and designers from ZF and the former TRW have been sharing notes, exchanging ideas and identifying best practices, and some of the resulting technologies will be ready for market in the near future....More

Ann Arbor’s Mcity test track includes four traffic lights, an underpass, metal bridge deck, gravel roadways and parking spaces that are angled, perpendicular and parallel. Efforts are under way to open a similar but larger facility nearby in Ypsilanti....More

Located on the University of Michigan campus in Ann Arbor, Mcity is a $10 million 32-acre (13-ha) test track with roundabouts, bike lanes, a tree canopy and 4-way intersections to simulate small-town traffic situations.

I-GAME’s focus is on cooperative solutions and the scenarios for next year’s competition during Dutch Technology Week have been selected to highlight situations where cooperation is superior to autonomy....More